After a Very Successful Year When the Firm Exceeded Targeted

question 178

Multiple Choice

After a very successful year when the firm exceeded targeted earnings levels by 10 percent,the CEO of Bain Industries decided to give each employee extra pay equal to 10 percent of what they earned for the year.Bain is using a plan called

• A) merit salary.
• B) pay-for-knowledge.
• C) profit-sharing.
• D) gain-sharing.
• E) pay-for-performance.

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Definitions:

Reserve Requirements

Regulations set by central banks that determine the minimum amount of reserves a bank must hold against deposits, affecting the money supply.

U.S. Government Securities

Financial instruments issued by the United States Department of the Treasury to finance government spending, including bonds, bills, and notes.

Open Market

A freely competitive market in which any buyer or seller may participate and where transactions are not restrictively regulated by government.

Interest Rates

The percentage of a loan that is charged to the borrower as interest, usually presented as an annual rate of the remaining loan balance.